Ochoa Inc. had the following condensed balance sheet at the end of operations for 2009. During 2010

Question:

Ochoa Inc. had the following condensed balance sheet at the end of operations for 2009. During 2010 the following occurred.

1. A tract of land was purchased for $11,000.

2. Bonds payable in the amount of $20,000 were retired at par.

3. An additional $10,000 in capital stock was issued at par.

4. Dividends totaling $9,375 were paid to stockholders.

5. Net income was $30,250 after deducting depreciation of $13,500.

6. Land was purchased through the issuance of $22,500 in bonds.

7. Ochoa Inc. sold part of its investment portfolio for $12,875. This transaction resulted in a gain of $2,000 for the company. The company classifies the investments as available-for-sale.

8. Both current assets (other than cash) and current liabilities remained at the same amount.

(a) Prepare a statement of cash flows for 2010 using the indirect method.

(b) Prepare the condensed balance sheet for Ochoa Inc. as it would appear at December 31,2010.

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